Good evening folks...
If you'd like a reminder of why you're paying attention/learning to trade for profit...
Take the amount you currently save per month... multiply that by 12... and multiply that by the number of years you have left until retirement.
Then...
Multiply the number of years you expect to live in retirement (most people use 20) by 12... That gives you you 240 months...
Then...
Divide the number you got in the first calculation by that 240...
This will give you a rough idea of how much you will be able to add to your social security and any other retirement income each month.
For example... let's say you're 50 years old (the average age when folks start worrying about this stuff). And you save 10% of your 10k gross salary each month ($1,000). And yes, I know not everyone makes $120,000/year, but bear with me.
Assuming you will retire at 65, that gives you 15 years * $12k or $180,000. That $180,000 divided by 240 gives you $750/month...for 20 years.
Now obviously there are a ton of assumptions here...
- presumably you already have at least some savings, so that $750 will be bigger...
- it's also reasonable to assume you will get at least some growth on your savings, so that number should be higher than $180,000.
On the negative side, while you might be thinking $750/month is not so bad, consider...
- inflation is a real thing... official government statistics notwithstanding...
- honestly, will you REALLY save 10% of your gross each month... consistently?
- health care... 'nuff said.
To be clear, intense saving is important... But if you don't get some growth of you assets, retirement won't be as golden as you would hope.
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Stay simple.
